By Microchip Technology, a leading chip manufacturer, has announced that their December quarter results are expected to fall below their previous forecast. This is primarily due to the challenging economic environment faced by their customers and distributors during this period.
According to CEO Ganesh Moorthy, the weakening economy has prompted many of Microchip’s stakeholders to request a lower level of shipments as they aim to reduce inventory and mitigate risks. As a result, the company’s revenue for the December quarter is projected to decline by 22%, compared to the previous quarter. This update deviates from their earlier guidance of a decline ranging from 15% to 20%. Market analysts had initially predicted a 17% drop in revenue for the quarter.
Microchip’s stock has already reacted to this news, with a 5.4% decline in after-hours trading, settling at $81.
Interestingly, Microchip is not the only chip company grappling with disappointing news. Just last week, Mobileye, another prominent player in the industry, also reported a significant decline in first-quarter revenue. Their revenue is expected to decrease by 50% compared to the previous year, contrary to Wall Street’s projected increase. Mobileye attributed this decline to a surplus of EyeQ computer chips, their flagship product, in the inventories of auto manufacturers who utilize these semiconductors.
Despite these challenges, Microchip remains a dominant player in the market, supplying basic chips to a wide range of industries such as industrial, automotive, consumer, defense, communications, and computer sectors. With over 125,000 customers globally, Microchip continues to play an instrumental role in powering various products and technologies.
Comments